Delphi strike threat casts shadow on trucking

General Motors is facing the possibility of a strike at its primary supplier, Delphi, which could quickly shut down GM assembly lines

General Motors is facing the possibility of a strike at its primary supplier, Delphi, which could quickly shut down GM assembly lines. A strike could have result in wide repercussions for carriers, according to Chris Brady, president of Commercial Motor Vehicle Consulting (CMVC).

Delphi, which filed for bankruptcy protection last October, recently announced plans to cut wages from nearly $27/hr. to $16.50/hr., a move that the UAW calls “outrageous.” The union also noted that if the bankruptcy court rejects a UAW-Delphi contract and Delphi implements its planned wage structure, “it will be impossible to avoid a long strike.” No further negotiations have been scheduled and, in a March 31 statement, UAW said, “today it appears there is no basis for continuing discussions.”

“If Delphi goes on strike, that implies that GM plants will shut down in a relatively short period of time,” CMVC’s Brady told FleetOwner.

“Anything that shuts down GM assembly of autos would be huge for certain truckers,” CMVC’s Brady told FleetOwner. “It definitely has huge implications for carriers that haul finished autos, but the impact would also be felt by carriers that haul auto parts. [Auto parts] is a big business and you have to look at it on a carrier-by-carrier basis. But overall, Delphi could have a big impact” on the industry.

In other GM news, the company sold a 51% stake in its lucrative financing arm, GMAC, to Cerberus Capital Management LP. The $14-billion transaction is actually good news for truckers. “That’s more cash to keep them alive,” Brady said.

Wall Street, on the other hand, may not react so positively. The move could be seen as a kind of high-stakes gamble, with the auto giant divesting itself of a profitable enterprise to save its unprofitable core car business.